Details of the Section
3.Paragraph 1 of the section provides for amendments to ITTOIA 2005.
4.Paragraph 2 inserts a new subsection (4) in section 627 of ITTOIA which gives exceptions from the rule in section 624(1) of ITTOIA for certain types of income. The rule in section 624(1) states that income which arises under a settlement is treated for income tax purposes as only that of the settlor if it arises during the settlor’s life and from property in which the settlor has an interest. The new sub section (4) provides that the rule in section 624(1) does not apply to income arising from a settlement, as defined in section 620(1), which originates from any settlor who was not an individual. The effect of the amendment is that income from a settlement in which the settlor has an interest is not treated as income of the settlor for tax purposes if the settlor was not an individual.
5.Paragraph 3 amends section 645(2) of ITTOIA so that it refers to section 627 as well as to section 644. Where there is more than one settlor, section 644 provides that the settlements legislation has effect as if each settlor were the only one. It then provides that property comprised in, and income arising under, a settlement should be taken to refer to property and income originating from that settlor. The amendment to section 645 ensures that ‘income originating from the settlor’ has the same meaning in section 627 as it does in section 644.
6.Paragraph 4 gives the commencement provisions. The amendments made by this section have effect on any income arising from the settlement on or after 21 March 2012.
